What is the primary purpose of international trade?

The primary purpose of international trade is grounded in the concept of comparative advantage, where countries can specialize in the production of goods and services for which they have a lower opportunity cost. This specialization allows them to produce more efficiently than they would if they attempted to produce everything domestically. By engaging in trade, countries can exchange these specialized products and services, which leads to a more efficient allocation of resources globally.

This efficiency facilitates economic growth as countries can save on production costs, access a wider range of goods and services, and enhance consumer choice. Additionally, international trade can spur innovation and competition, as countries strive to meet international standards and consumer preferences. This collaborative economic relationship ultimately boosts productivity and improves the standard of living within the trading nations.